Nostra Terra eyes largest US oil investment

A small British oil explorer and producer, Nostra Terra Oil & Gas, is poised to make a major investment in its largest ever potential oil field in the fracking-friendly USA.

The AIM-listed tiddler, which is capitalised at around £5m, is rumoured to be looking at a deal in Texas that would transform the size of its current production acreage.

Nostra Terra already has a portfolio of assets in the US, many of which employ horizontal drilling, in Colorado, Oklahoma, Wyoming and elsewhere in the Lone Star state.

February's production update showed December net production averaged 169 barrels of oil equivalent per day (boepd) net of royalties, more than double its figure from September.

Quarterly production increase of 68% over the previous quarter and revenue increased 20% quarter-on-quarter.

Chief executive Matt Lofgran at the time stated the company's focus on securing and maintaining steady production in order to allow the company to search for growth opportunities without the need for external investment.

"We are currently cash flow positive with free cash flow adding to our existing cash in the bank," he said.

The small cap oil space has recently been the scene of much excitement around a massive potential oilfield in southern England announced by AIM peer UK Oil & Gas Investment, which was later tempered somewhat by fracking concerns and the company's admission that it has little idea of the real size of resource beyond its own acreage.